Slide 1: Investors Presentation
Investors Presentation 10 & 11 May 2005 FOR THE SIX MONTHS ENDED 31 MARCH 2005
Slide 2: Group Income Statement
REUNERT jEAS 3) REUNERT LIMI GROUP INCOME STATEMENT Stemonths enced 31 March Yestandd 0 ae x Ariin Arak % Arik Woes Weaxtiod eax chau Riverts im 30nd 9 6Mna Earinysbetbro rtsred, (2, deprciaion aneianont tation (BETA 519 m4 B Oxpretan 29 Bi $ (Operating proft bere sanattiat in of goed CT) war v veni
Slide 3: Reunert Limited
REUNERT REUNERT LIMITED Engineering Flaciranics Jnvesinents ‘GB NASHUAWNA SIEMENS NASHLIAWE (ATC © REUTECH
Slide 4: Fact Sheet for Six Month Period
FACT SHEET FOR SIX MONTH PERIOD Current market capitalisation R6,9 billion Revenue R3,3 billion EBITDA R460 million EBITDA as % of turnover 14% Interim dividend 52 cents per share Share price: 9 May 3724 Weighted average number of shares used to calculate earnings per share 173 million
Slide 5: Highlights for the 6 Month Period
HIGHLIGHTS FOR THE 6 MONTH PERIOD • Impact of compulsory share buyback – 9% • Electrical group slowly taking form – ATC & African Cables business combined – BEE partner finalised – New products launched • Improved ROE from 50,5% to 62,9%
Slide 6: Financials
FINANCIALS REUNERT
Slide 7: Solid Financial Performance
SOLID FINANCIAL PERFORMANCE • HEPS up 31% – 181.2 cents (HY04: 138.7 cents) • Turnover increased by 9% – R3,3 billion • Operating profit increased by 28% – R433 million • Headline earnings improved to R313 million • Interim dividend of 52 cents per share – 30% up
Slide 8: Dividends (cents per share)
DIVIDENDS (cents per share) 120 100 80 60 40 20 0 00 01 02 03 04 05 Interim Final Linear (Interim)
Slide 9: Income Statement
INCOME STATEMENT HY05 HY04 % Rm Rm change Revenue 3,276.0 3,011.9 9 EBITDA 459.9 390.4 18 Operating profit 433.0 339.5 28 Net interest and dividend income 16.5 28.5 (42) Profit before taxation 449.5 388.3 16 Profit after taxation 293.4 246.8 19 Share of associate companies' profits 29.6 33.1 (11) Ea
Slide 10: Balance Sheet
BALANCE SHEET R million 31 March 2005 31 March 2004 Non-current assets Property, plant and equipment 193 201 Goodwill 253 313 Investments 110 70 Finco accounts receivable 761 236 Deferred taxation assets 47 33 1,364 853 Current assets Inventory & contracts in progress 518 443 Accounts receivable 962
Slide 11: Group Cash Flow Information
GROUP CASH FLOW INFORMATION R million 2005 2004 EBITDA 460 390 (Increase)/decrease in net working capital (312) 1,065 Finco receivables (232) 984 Other working capital (80) 81 Cash generated from operations 148 1,455 Net interest and dividends received (incl associates) 57 29 Taxation paid (244) (19
Slide 12: Profitability Ratios
PROFITABILITY RATIO’S EBITDA % Operating margin (%) 14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 0 00 01 02 03 04 HY05 00 01 02 03 04 HY05
Slide 13: Profitability Ratios: Return on Equity and Net Operating Assets
PROFITABILITY RATIO’S Return on equity (%) Return on net operating 70 assets (%) 60 120 50 100 40 80 30 60 20 40 10 20 0 0 00 01 02 03 04 HY05 00 01 02 03 04 HY05
Slide 14: Segmental Analysis: Revenue
SEGMENTAL ANALYSIS HY05 % HY04 % % REVENUE Rm Rm change Electrical Engineering 877 22 667 18 31 Electronics Office systems 419 11 502 13 (17) Consumer products and services 1,847 46 1,664 45 11 Telecommunications 704 18 704 19 - Reutech 133 3 179 5 (26) Total Electronics 3,103 78 3,049 82 2 Total op
Slide 15: Segmental Analysis: Operating Profit
SEGMENTAL ANALYSIS OPERATING PROFIT BEFORE HY05 % HY04 % % GOODWILL AMORTISATION Rm Rm change Electrical Engineering 171 35 114 27 49 Electronics Office systems 111 23 86 20 29 Consumer products and services 156 32 150 36 4 Telecommunications 52 11 56 13 (7) Reutech (4) (1) 16 4 (125) Total Electron
Slide 16: % Contribution
% Contribution Revenue Operating profit Reutech Telecom Consumer Telecom -1% Reutech 11% 18% 32% 3% Electrical 22% Electrical 35% Consumer Office Office 46% systems systems 11% 23%
Slide 17: Group Operations
GROUP OPERATIONS REUNERT
Slide 18: CBI
CBI • Residential sector buoyant • Depressed sales – Mining – Exports – Mainly due to stronger rand • Launched wiring accessories in February – Rapid market share gains • Heinemann Australia – Acquired July 2004 – Ahead of budget – Launching Mitsubishi product range • New plant in Lesotho – Operatio
Slide 19: ATC
ATC • Trading profitably • Acquisition of African Cables business completed • Powerhouse Utilities – 25,1% shareholding • Life after Telkom – Nearly 60% of orders received are non-Telkom – 21% exports • Diversifying customer base – Process/Petro Chemical market – Data communications market – Mining
Slide 20: African Cables (division of ATC)
AFRICAN CABLES (division of ATC) • Order intake continues to grow • Powerhouse Utilities 25,1% empowerment partner • Capacity constraints addressed – R6 million invested to date – Rod conversion plant: R16 million – 3 additional machines: R16 million – Should be on stream January 2006 • Cafca in Zim
Slide 21: Nashua
NASHUA • Nashua Kopano – Black owned franchise merged with Nashua Direct business – BEE shareholding 26% • Strong growth in volumes of multi functional machines – Printer sales: increased 2½ times previous year – Colour printer sales twice that of previous year – Increased total document volume Marc
Slide 22: Nashua Finance
NASHUA FINANCE • Successfully rebuilt the finance book after sale in 12/03 – R761 million • Swaps taken • Book – 20% linked rates. 80% fixed rates – 18 000 contracts on own book – Average period 31/2 - 4 years
Slide 23: Nashua Mobile
NASHUA MOBILE • Buoyant consumer demand continued • Customer base has grown by 28 000 since year-end – 361 000 contract subscribers Sept 04 – 389 000 contract subscribers March 05 • Real average revenue per user – R534 (Handset business R457 + LCR R1 623) – FY04: R538 • Revenue – 70% handset busines
Slide 24: Reunert Consumer & Commercial
REUNERT CONSUMER & COMMERCIAL • Distributor of consumer electronics and business systems • Multiple brands – Panasonic, Futronic, Nintendo – New brand: Akai • Consumer product prices continued to decline • Higher volumes sold • Market position greatly improved
Slide 25: Reutech
REUTECH • Order book is a serious concern • Difficult trading conditions – Denel situation – Suspension of Armscor senior personnel – International markets wary of SA
Slide 26: Siemens Telecommunications
SIEMENS TELECOMMUNICATIONS • Strong order book • Exchange rate has a negative impact on absolute profits • STC • Fixed line business – Telkom upgrade of switches to soft switch status continues • Mobile business – Vodacom 3G roll-out nearing completion (initial phases) – Cell C considering 3G
Slide 27: Prospects
PROSPECTS With the exception of Reutech, the group’s operations are expected to enjoy buoyant market conditions. Reunert should continue to deliver real headline earnings growth.
Slide 28: Changes to Board
CHANGES TO BOARD • DE Cooper – Resign as chairman • MJ Shaw – Incoming chairman • KS Fuller – Non-executive director – Chairman of audit committee
Slide 29: Contact details
Contact details Carina de Klerk invest@reunert.co.za Tel +27 11 517 9000